In July, 1986, plaintiff The Leonard Partnership ("the
partnership"),*fn1 a family partnership, submitted a
subdivision application to the Planning Board ("the Board")
for defendant and third-party plaintiff, the Town of Chenango
("the Town").*fn2 According to the Town, certain questions
arose during the application review process pertaining to the
nature of the water and sewer services to be provided to the
proposed subdivision. Those questions had to be answered by
the partnership prior to the final stages of the subdivision
application procedure.

In October, 1986, the Town Engineer recommended that public
water be required.*fn3 One month later the Broome County
Department of Planning and Economic Development recommended
that the Town withhold its approval of the subdivision
application until questions regarding water and sewer services
were resolved.*fn4 Apparently in an attempt to answer some of
those concerns, Dobbs Engineering Firm, P.C. ("Dobbs"), the
engineering firm retained by the partnership in connection
with this project, informed the Board that the partnership
planned to use septic sewer systems in the proposed
subdivision.*fn5 Dobbs further advised the Board that its
original plan to use individual wells had been rejected by the
Broome County Department of Health ("DOH").*fn6 In addition,
Dobbs reported to the Board that "[w]e will have public
water,. . . ."*fn7 Evidently that response did not satisfy
either the Town Planning Board or the Broome County Planning
Board; nor did it satisfy the DOH. Thus, primarily out of a
concern over the water and sewer systems, the Town Planning
Board did not take any further action regarding the
subdivision application. The Town Planning Board was awaiting
additional submissions from the partnership, as well as for
comments from other government agencies.*fn8

In February, 1987, the DOH notified the Town Engineer that
"[i]nstallation of public water will be a requirement of this
Department" because of the proximity of the subdivision
property to the Town landfill.*fn9 One of the reasons given
for the public water requirement was DOH's belief that a water
septic system based upon 45 individual wells adjacent to the
landfill might result in the migration of contaminants from
the landfill to the subdivision property and into the
groundwater thereunder.*fn10 The DOH believed that public
water was "readily accessible" and could be easily extended to
the partnership's property because of the Town's plan to
extend public water to serve another development near the
partnership's property.*fn11 In addition to the public water
requirement, a Senior Public Health Engineer for DOH also
informed the Town Engineer of the necessity of developing a
"comprehensive
sewage plan for the entire area including existing houses. .
. ."*fn12 In March, 1987, David Leonard, one of the partners
in the partnership, applied for and was issued individual
sewage specifications with a private well for the construction
of a single family dwelling on the subject property.*fn13 The
DOH engineer, claims, however, that the issuance of those
individual sewage specifications by the DOH was erroneous
because when David Leonard applied for those specifications,
he failed to inform DOH that the lot was part of the
subdivision property near the landfill.*fn14 As a result, the
DOH engineer wrote the Town's Ordinance Officer recommending
that the building permit for this property be withheld.*fn15
He also indicated that DOH would not issue any further
individual sewage specifications.*fn16 In DOH's view, the
application for the single family residence was simply a means
to circumvent DOH's public water requirement.

On April 27, 1987, David Leonard then applied for a building
permit to construct a single family house with attached garage
on the subject property.*fn17 On May 11, 1987, the Town's
Ordinance Officer denied that application stating that the
application was "incomplete" in that it was not accompanied by
a site plan; nor had Mr. Leonard obtained the DOH's approval
for water supply and septic systems.*fn18

Plaintiffs then commenced this lawsuit in January, 1988,
alleging six causes of action. The first cause of action is
brought pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et
seq. The second, third and fourth causes of action are based
upon the New York State law of public nuisance. The fifth cause
of action seeks restitution under New York State law on a
theory of unjust enrichment. Finally, in the sixth cause of
action plaintiffs allege that the Town has taken their property
without just compensation and violated their due process
rights.

The Town advances a number of reasons as to why each of
those causes of action must fail as a matter of law. The court
will first consider the federal claims because if the Town is
entitled to summary judgment dismissing those claims, the
court will in all likelihood not be inclined to entertain the
remaining pendent state claims.

DISCUSSION

I. CERCLA Cause of Action

With respect to the CERCLA cause of action, basically
plaintiffs allege that the Town's municipal landfill, directly
adjacent to their property, is contaminated with hazardous
substances, which have been released from the site and have
damaged their property. Plaintiffs further allege that they
have incurred "substantial expenses and response costs" to
"assess the damages to natural resources and to the ground
water. . . ."*fn19 In an attempt to determine the exact
nature and extent of this broadly stated CERCLA claim, the
Town served two sets of interrogatories upon plaintiffs.

In the first set, the Town specifically asked plaintiffs to
list and describe in detail
expenses incurred with respect to the subject property.*fn20
Along those same lines, the Town asked plaintiffs to provide
it with detailed information concerning any tests or studies
conducted upon the property.*fn21 Plaintiffs responded that
they had incurred engineering fees in the amount of
$3,123.66.*fn22 Plaintiffs further responded that, "legal
fees and engineering fees are accruing."*fn23 When asked to
describe in "detail" the reasons for those expenses,
plaintiffs simply responded: "Engineering fees to develop
property; others are self-explanatory."*fn24

The Town then requested documentary evidence relating to
those expenses.*fn25 In response, plaintiffs provided an
invoice from their engineering firm indicating that its "fee
for consulting engineering services rendered" as of November
2, 1986 was $3,623.66, and that a retainer had been paid in
the amount of $500.00.*fn26 Plaintiffs also produced a copy
of a check in the amount of $500.00 made payable to their
engineering firm.*fn27 Plaintiffs produced what appears to be
a receipt indicating a payment to Dobbs Engineering; the
amount paid appears to be $3,123.66.*fn28 Plaintiffs admit,
however, that as of October 27, 1988, no hydrogeological tests
or studies had been undertaken; nor had any independent lab
tests been performed.*fn29 (Presumably that is still
plaintiffs' position, because they have never supplemented
those answers to interrogatories.) Plaintiffs' engineering
firm did consider an alternate water supply system ("AWS"),
though.*fn30

The Town contends that plaintiffs' CERCLA cause of action is
defective because they have not incurred costs due to the
alleged release or threatened release of hazardous substances,
as required under the statute. The Town further contends that
even if this court finds that plaintiffs have incurred that
type of costs, their CERCLA claim must, nonetheless, fail
because such costs clearly do not constitute "response" costs
within the meaning of 42 U.S.C. § 9607(a)(4) (West Supp. 1991).
Finally, the Town asserts that any costs allegedly incurred by
plaintiffs are not recoverable because such costs are not
consistent with the national contingency plan, as §
9607(a)(4)(A) requires. Thus, the Town asserts, summary
judgment must be granted dismissing plaintiffs' CERCLA cause of
action. In the alternative, the Town moves for a declaratory
ruling that any recovery by plaintiffs on their CERCLA claim be
limited to an amount not to exceed $500.00 — the amount the
Town believes plaintiffs are claiming as response costs in
their answers to interrogatories.

It is very difficult, in fact nearly impossible, to discern
from their papers exactly what plaintiffs' position on this
issue is, except to say that, not surprisingly, that they
contend that they have and will incur CERCLA response costs.
Plaintiffs simply make the bald assertion that "[t]here are
`response costs.' . . .;" yet they do not specify in their
memorandum of law or elsewhere what they believe those costs
to
be.*fn31 Plaintiffs also make the statement, unsupported by
any legal authority, that "Studies and reports by experts to
accomplish remedial action are also recoverable costs."*fn32
More importantly, though, is that plaintiffs did not submit
any proof on this motion establishing that they incurred any
such costs. Lastly, plaintiffs are apparently also seeking to
recover for the cost of obtaining an AWS. Plaintiffs contend
that with respect to that cost, summary judgment is not
appropriate because a factual issue exists as to whether there
is a threat to the water supply.

A. Response Costs

1. Attorneys' Fees

The first issue pertaining to the CERCLA claim is whether
plaintiffs are entitled to recover attorneys' fees as a
response cost thereunder. Plaintiffs did not bother to address
this issue. It is not entirely clear from their answers to
interrogatories whether plaintiffs are even seeking to recover
their attorneys' fees as a CERCLA response cost. That
uncertainty arises from the fact that when first asked about
expenses incurred in "connection with the operation" of the
subject property, plaintiffs responded, "[l]egal fees . . .
are accruing."*fn33 When specifically asked about response
costs, however, in that same set of interrogatories,
plaintiffs did not specify attorneys' fees as such a
cost.*fn34 In response to the Town's second set of
interrogatories, plaintiffs also did not identify attorneys'
fees as a response cost.*fn35 Given those responses and
plaintiffs' failure to address this issue in their memorandum
of law, it appears to the court that plaintiffs are not
seeking attorneys' fees as a CERCLA response cost.
Nonetheless, in the event that assumption is wrong, because
the Town has raised this issue in its motion papers, the court
will fully address it.

There is a split of authority as to whether attorneys' fees
are recoverable as a response cost under CERCLA. See In re
Hemingway Transport, Inc., 126 B.R. 656, 663 (D.Mass. 1991)
(and cases compiled therein); see also State of New York v. SCA
Services, Inc., 754 F. Supp. 995, 1000 (S.D.N.Y. 1991) (striking
portions of counterclaims seeking attorneys' fees under
CERCLA). This court is convinced, however, that the more sound
view is that attorneys' fees are not recoverable as response
costs under CERCLA. The court finds persuasive the reasoning in
Hemingway, wherein the court explained:

A careful review of the statute persuades me
that the costs of litigation are not recoverable
by a private litigant. I start with the general
principle that "[A]bsent explicit Congressional
authorization, attorneys' fees are not a
recoverable cost of litigation." Runyon v. McCrary,
427 U.S. 160, 185, 96 S.Ct. 2586, 2602, 49 L.Ed.2d
415 (1976). CERCLA provides no such explicit
authorization. The statute elsewhere specifically
provides that the government can recover legal
costs, 42 U.S.C. § 9604(b) (1988), but fails to
extend that right to private parties. Nor can
private litigation expenses be considered
recoverable "enforcement activity" within the
meaning of the statute; while `plaintiffs may bring
an action for recovery of response costs, they may
not bring an action to enforce CERLCA's cleanup
provisions against another private entity.'. . . .

Id. at 149. Congress did not enact such an amendment, however.
Thus, based upon the foregoing, insofar as plaintiffs are
seeking to recover attorneys' fees as a CERCLA response cost,
the Town's summary judgment motion must be granted with respect
to that aspect of the CERCLA claim.

2. Engineering Fees/"AWS"

In Artesian Water Co. v. Government of New Castle County,
659 F. Supp. 1269 (D.Del. 1987), aff'd, 851 F.2d 643 (3rd Cir.
1988), a case properly relied upon by the Town, the court
recognized that, "[t]he cases firmly establish that the
incurrence of response costs is an essential element of a prima
facie case under section 107(a)." Artesian Water, 659 F. Supp.
at 1285 (and cases cited therein). Although the term "response
cost" is not expressly defined in CERCLA, id. at 1286 n. 28,
"response" is defined as "remove, removal, remedy, and remedial
action." 42 U.S.C. § 9601(25) (West Supp. 1991). The statutory
definition of "removal" includes "the cleanup . . . of released
hazardous substances from the environment."
42 U.S.C. § 9601(23) (West Supp. 1991).

Based upon the record as it is now constituted, clearly
plaintiffs have failed to meet their burden on this summary
judgment motion; that is, they have failed "[t]o make a
showing sufficient to establish the existence of an element
essential to [their] case. . . ." See Celotex Corp. v. Catrett,
477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).
Namely, plaintiffs did not submit any proof establishing that
they have incurred recoverable response costs under CERCLA. As
set forth above, the only evidence plaintiffs have produced
regarding alleged response costs is, as the Town points out,
the costs they incurred as part of their subdivision
application.

As the Town persuasively notes, there is simply "no
relationship whatsoever" between plaintiffs' claimed response
costs and their CERCLA claim.*fn36 The engineering fees were
incurred solely in connection with plaintiffs' application to
subdivide and develop the subject property. For example, the
Town Code explicitly requires that a subdivider must submit to
the Planning Board a "proposed sanitary sewer and water supply
plan."*fn37 Moreover, plaintiffs have not come forth with any
evidence even tending to establish that those engineering
costs were somehow related to CERCLA response costs. Indeed,
plaintiffs themselves characterize those costs as "engineering
fees to develop property."*fn38 The costs plaintiffs have
incurred are no different than any person would expect to
incur when seeking to subdivide property in the Town of
Chenango. It would be ironic, to say the least, if all
subdivision applicants could recover under CERCLA costs
normally incurred with respect to processing a subdivision
application.

Finally, plaintiffs are apparently claiming that they have
or will incur response costs relating to an AWS. While it is
true that under certain circumstances an AWS is considered to
be a recoverable CERCLA response cost,*fn39 there is nothing
before the court demonstrating what portion, if any, of the
engineering fees charged to plaintiffs were related to either
the study of an AWS, or the actual cost of acquiring such a
system. Although plaintiffs claim that they incurred $500 in
costs for an engineering study, which considered an AWS,*fn40
the invoice simply states "fee for consulting engineer
services rendered."*fn41
And coincidentally, that invoice also shows that $500.00 was
paid as a "retainer."*fn42 There is certainly no mention of
an AWS on that invoice. Likewise the copy of the check made
payable to plaintiffs' engineering firm, and the receipts for
payments thereto, state only that those payments were for
"engineering fees."*fn43 Consequently, there is absolutely no
proof before the court that the engineering fees which
plaintiffs have incurred to date relate to the AWS.

It should be noted that in his affidavit, plaintiffs'
attorney states that plaintiffs "will be required to incur
$175,000 in response cost for development of an alternate water
supply. . . ."*fn44 The record before the court on this
motion, however, is completely devoid of any proof showing: (1)
that plaintiffs have actually incurred such costs and (2) that
the alleged necessity of such study or system is as a result of
the release or the threatened release of hazardous substances.
Furthermore, the Town Code appears to require a plan for an AWS
as part of a subdivision application.*fn45 Therefore, as with
the other claimed engineering costs, these costs, if any, were
or would simply be a part of the subdivision application — not
part of any alleged CERCLA response, as plaintiffs would like
this court to conclude.

Having determined that plaintiffs' CERCLA cause of action is
lacking because of a failure to demonstrate that they have
incurred recoverable response costs, the court need not
consider whether the alleged costs are consistent with the
national contingency plan. Nor does the court need to address
the Town's alternative argument for a declaratory ruling.
Plaintiffs' complete failure in meeting their burden of
establishing an essential element of a CERCLA claim — the
incurrance of recoverable response costs — requires that the
Town's summary judgment motion on that claim be granted in its
entirety.

II. Unconstitutional Taking

The parties recently entered into a Stipulation and Order of
Dismissal pursuant to Fed.R.Civ.P. 41(a)(2) with respect to
plaintiffs' sixth cause of action, insofar as that action is
based upon an unconstitutional taking of property in violation
of the fifth amendment. That stipulation renders moot the
Town's summary judgment motion on this particular claim.

III. Due Process

Even though that stipulation and order of dismissal related
primarily to the taking claim, it is relevant in determining
the scope of the due process claim presently before the court.
That stipulation stated:

It is also understood and agreed between the
parties that this stipulation does not dismiss
Plaintiff's sixth cause of action to the extent
that it alleges a constitutional claim
arising out of Defendant's denial of a building
permit on May 11, 1987, or other cause of action
for failure to issue a building permit, if any.

The Town asserts that because only David Leonard submitted
the building permit application, which was denied, only he has
standing to challenge the denial of that permit.*fn46
Therefore, argues the Town, any due process claims asserted by
the other plaintiffs must be dismissed because they lack
standing to assert such claims.*fn47 The court cannot
thoroughly address the Town's standing argument, however,
without first determining exactly who the plaintiffs are in
this action, and in what capacity they are suing. The
determination of the capacity to sue is a different concept
than is standing.*fn48

Unfortunately the complaint is ambiguous in this regard. The
caption in the complaint describes the plaintiffs as follows:
"The Leonard Partnership, a Partnership consisting of Walter
Leonard, David Leonard, Robert Leonard, Bertha Miller, and
Donna Dimick."*fn49 Nowhere else in the complaint is the
partnership referred to by name; nor are any of the copartners
referred to by name in the body of the complaint. Therefore,
it is impossible to tell from the face of the complaint
whether the partnership is the only plaintiff; or whether the
plaintiffs consist of the partnership and the copartners
solely in that capacity; or whether the plaintiffs are the
partnership, and the individual copartners in that capacity,
as well as in their individual capacities.

The Town's standing argument appears to be premised on this
last scenario; and the court agrees that under the relevant
law that is the only logical interpretation. In reaching that
conclusion, the court starts from the rule that generally a
partnership's capacity to sue or be sued is determined by the
law of the state in which the district court sits.
Fed.R.Civ.P. 17(b)(1). Therefore, New York law governs the
capacity of this partnership to sue, and New York law
expressly allows for a partnership to sue or to be sued in the
partnership name. N.Y.Civ.Prac.Law & R. § 1205 ("CPLR")
(McKinney 1976). Clearly then The Leonard Partnership did
properly bring this action on behalf of the partnership in its
own name.

With respect to the partnership itself, the only way it
could have standing to assert a due process claim based upon
the denial of the building permit is if David Leonard
submitted that building permit on behalf of the partnership
jointly. That is so because under New York law, an individual
partner may not assert the claim of the partnership.
M.I.F. Secur. Co. v. R.C. Stamm & Co., 94 A.D.2d 211, 216, 463
N YS.2d 771, 775 (1st Dep't), aff'd in part, 60 N.Y.2d 936,
471 N.Y.S.2d 84, 459 N.E.2d 193 (1983). There is nothing in the
record as it is presently constituted, however, to support such
a finding; that is that when he submitted the building permit,
David Leonard was acting as a copartner on behalf of the
partnership.

The complaint alleges that "plaintiffs" requested a building
permit on April 27, 1987, and that a building permit was not
issued to "plaintiffs."*fn50 The documentary evidence before
the court, in the form of the building permit
application,*fn51 does not support that assertion, however.
That application is signed by David M. Leonard, Jr. and his
title on the application is listed as
"owner-contractor."*fn52 There is absolutely no mention on
the face of that application that Mr. Leonard was seeking the
permit in any capacity, other than as an individual. There is
no mention or reference to the partnership. Nor is there
anything in the record stating, or from which the court could
infer, that David Leonard had authority to act on behalf of
the partnership with respect to that building permit
application.*fn53 Thus, because the record does not support
a finding that David Leonard was seeking the building permit
on behalf of the partnership, the court is convinced that
insofar as the complaint alleges a cause of action by the
partnership based upon a denial of the building permit, that
cause of action must be dismissed for lack of standing.

As an aside, the court observes that the building permit
application submitted by David Leonard pertained to one single
family dwelling. Therefore, the seeking of a building permit
for a single family dwelling is arguably inconsistent with
seeking a permit on behalf of the partnership which is engaged
in a subdivision development. So, the court concludes that The
Leonard Partnership cannot assert any due process
claim arising out of the denial of the building permit
submitted by David Leonard.

At long last, the court can focus on the heart of this
controversy — the Town's denial of the building permit sought
by David Leonard. Relying primarily upon RRI Realty Corp. v.
Southampton, 870 F.2d 911 (2d Cir.), cert. denied,
493 U.S. 893, 110 S.Ct. 240, 107 L.Ed.2d 191 (1989), the Town contends
that David Leonard cannot show a due process violation based
upon the denial of his building permit application. The Town
proffers four reasons to support its position. First, the Town
asserts that David Leonard's due process claim must fail
because he cannot show a clear entitlement to the building
permit, and thus he can show no property interest protected by
the fourteenth amendment.*fn54 Second, the Town claims that
David Leonard cannot show that the building permit was denied
for an improper purpose.*fn55 Third, the Town points to the
fact that the denial was at the request and direction of the
DOH, which informed the Town that David Leonard's building
permit application was defective.*fn56 And fourth, the Town
contends that the application was incomplete.*fn57

In RRI Realty, the Second Circuit had occasion to address the
issue "[o]f whether an applicant for a building permit, . . .,
had a sufficiently clear entitlement to the permit to
constitute a property interest protected by the Due Process
Clause." Id. at 912. The Second Circuit, reversing the district
court, found that the record was insufficient to support such a
finding. In so
doing, the Court reiterated the entitlement test previously
enunciated in Yale Auto Parts, Inc. v. Johnson, 758 F.2d 54 (2d
Cir. 1985); that is that an applicant must show a "certainty or
a very strong likelihood" of issuance of the building permit.
Id. at 918 (quoting Yale Auto Parts, 758 F.2d at 59).*fn58
Significantly, the Second Circuit explicitly stated that "[t]he
fact that the permit could have been denied on non-arbitrary
grounds defeats the federal due process claim." Id. at 918.

After engaging in an entitlement inquiry, the Court in
RRI Realty did not agree with plaintiff that absent the alleged
denial of due process, there was a "certainty or a very strong
likelihood" that the municipal defendants would have granted
RRI's application for a building permit. The Court did not
accept that argument, despite that fact that there was evidence
of statements by municipal officials that approval of the
application was "probably forthcoming." RRI Realty, 870 F.2d at
919. Relying upon the fact that the municipal code conferred
"wide discretion" on the issuing agency to review the final
design plans, as well as upon the fact that the municipality
had offered several valid reasons for rejecting the
application, the Court found that "[a]s a matter of law, there
was no property interest in the permit." Id.

The same conclusion is warranted here; that is that as a
matter of law, David Leonard has not shown that he has a
property interest in the building permit. Without referring to
any specific provision of the Town Code, David Leonard asserts
that "[i]ssuance of a building permit is a non-discretionary
act when all of the conditions precedent have been met."
Plaintiffs' Letter Brief (March 15, 1991) at 2. Therefore, on
that basis, David Leonard apparently believes that he has
shown a clear entitlement to the building permit, and hence a
protected property interest for fourteenth amendment purposes.
The court does not agree.

In making his argument David Leonard is overlooking one
critical, undisputed fact, and that is the existence of a
legitimate, non-arbitrary ground for denying the building
permit application. In particular, the building permit could
have been denied solely on the non-arbitrary basis that David
Leonard failed to submit a site plan as required by § 73-32(B)
of the Town Code.*fn59 Thus, even absent the alleged denial of
due process, David Leonard simply cannot show that there was
either a "certainty or a very strong likelihood" that the
building permit application would have been granted. While it
is true that the discretion of the issuing agency here is not
nearly as broad as that afforded the issuing agency in RRI
Realty, that fact does not change the court's analysis.*fn60
Therefore, based upon the fact that David Leonard's building
permit could have been denied on the non-arbitrary ground that
he did not submit the requisite site plan with his permit
application, the Town's motion for summary judgment on that due
process claim must be granted. See RRI Realty, 870 F.2d at 918.

As is evidenced by the time and effort which this court has
spent in resolving the Town's motion, this case is clearly not
one in which an award of sanctions would be appropriate. This
is not a case, as the Town suggests, where plaintiffs and
their attorney "clearly knew or should have known that the
causes of action set forth in [their] complaint were
inappropriate and improper `after reasonable inquiry' of the
relevant facts and the applicable law." Memorandum in Support
of Defendant's Motion for Summary Judgment on Plaintiff's
Complaint at 66 (quoting Fed.R.Civ.P. 11). Thus, defendant's
motion for sanctions is denied.

In short, for all of the reasons discussed herein,
defendant's motion for summary judgment is granted, and the
complaint is dismissed.

IT IS SO ORDERED.

Our website includes the main text of the court's opinion but does not include the
docket number, case citation or footnotes. Upon purchase, docket numbers and/or
citations allow you to research a case further or to use a case in a legal proceeding.
Footnotes (if any) include details of the court's decision.

Buy This Entire Record For
$7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.